Intel wants you to feel safe in your 'smart' home

In decades to come, homes will get considerably "smarter," with control of more of today's common functions being outsourced to the Internet and often managed remotely — the promise of the so-called Internet of Things.

But, like almost everything in today's hyperconnected world, there will be trade-offs — the biggest one the potential threat from hackers and other malicious actors.

"If the Internet of Things (IoT) were being built without security in mind, literally billions of lives in the future would be at risk and literally, billions and billions, trillions and trillions of dollars," said IDC Research vice president Shane Rau. "Security has to be in it from the start, otherwise the stories we hear about Target being broken into and credit cards being stolen will get more fundamental."

So, for Intel, this becomes an opportunity.

"More and more, you're going to see a cross over between cyberthreat, and physical, and that's what concerns me the most," said Christopher Young, Intel Security Group senior vice president and general manager.

"Imagine 50 billion devices connecting up to the Internet over the next few years — each of those increases the surface area for attack. In the home, it's really no different," said Eric Free, vice president and general manager of Intel's Smart Homes and Buildings.

Source: Intel.

Interior of the Intel Smart Home.

Free said Intel envisions a world where homes talk to cars and neighborhoods, and in turn communicate with a whole city network. "We've spent a lot of time thinking about how we can build in security starting with the silicon — the semiconductors — and going up through the software to the cloud," he said.

The chipmaker laid out its vision for connected homes to developers, potential partners and analysts, unveiling its "Intel Smart Tiny House," a 210-square-foot "living lab" in San Francisco this week.

Seven in 10 Americans expect smart homes to be as ubiquitous as smartphones within 10 years, according to an Intel study. The company is betting that consumers will find that the benefits outweigh the risks. "We think those benefits are really significant, that the value to the consumer — to be able to look out for aging parents, or to more easily arrange their dinner and make sure that they've got the right ingredients — is significant enough to warrant the risk of security," said Free.

Intel wants to be the technology underlying connected homes of the future. To get there, it has to go head to head with consumer tech companies, including Alphabet with its Nest unit and Amazon's Alexa, as well as enterprise giants, such as Qualcomm with its Smart Home Gateway. Intel would not reveal how much it is investing in its home unit, which falls under the IoT group, but that group reported $581 million in revenue in the third quarter, up 10 percent over last year.

Intel says its experience in enterprise and industrial arenas makes it much more qualified to keep infrastructure secure, which it hopes will give it an edge over competitors. "Keep in mind, we're working with leaders across the globe to figure out how you secure critical infrastructure like power plants or chemical facilities, and much of that thinking also goes into our consumer devices as well," said Free.

Harriet Taylor | CNBC

Intel Smart Home coffee maker and tablet.

Analysts at the San Francisco event were generally upbeat. "Security for the smart home is technically achievable — it all depends on the price point. Any device that costs $50 or more should have enough headroom to incorporate the necessary security measures, such as sufficient processing power, to enable encryption," said Mark Hung, research vice president at Gartner.

The difficulty, said Hung, arises when lower cost devices without sufficient security are on the home network, providing an entry point for malicious attacks. "This is where having the aggregation point (or in industry-speak, the gateway) be intelligent enough to prevent the the attack from spreading becomes important," said Hung. "Intel takes a two-pronged approach: Making sure the individual devices have a secure ID so that they can be trusted, and having an intelligent gateway to provide additional security mechanisms for both the home and industrial applications."

"Part of making the home smart is to make the home smart enough to know where there are vulnerabilities, to make sure things like the firmware on your different devices like your smart locks are upgraded and updated," said Free. "No consumer really wants to become an IT manager for their home, so part of what we are trying to do is to simplify that and make the home smart enough to manage itself."

That's important, said Hung, because although analysts are bullish on the long-term potential of connected homes, they generally agree that it is going to take a long time before companies will reap the benefits of their investments. "Consumers are not buying it because they don't see the value," said Hung.

"Even when you saw the demo in there, sometimes it didn't work and with consumers, generally, if it didn't work that first time the magic is gone," Hung said.